Moving towards rolling out the Goods and Services Tax (GST) from April 1, the Centre and states on Thursday agreed on a timetable for deciding on the tax rate and completion of legislative work but differences remained on the turnover limit for exemption from the new tax.
The first meeting of the newly constituted GST Council saw states like Tamil Nadu and Uttar Pradesh demanding a larger say than one-state-one-vote principle that puts a smaller state on equal footing with a large manufacturing one.
While their demand was overruled, consensus also eluded first day of the meeting over the issue of exemption to dealers from the Goods and Services Tax (GST). While some states demanded traders with turnover of Rs 10 lakh or less be exempted, a large number, including Delhi, were in favour of the limit being fixed at Rs 25 lakh in a year.
With tax collected from traders being just 2 percent of the total tax collection, majority view was in favour of a higher exemption limit.
The GST Council, which is headed by Union Finance Minister Arun Jaitley and includes representatives of all the 29 states and 2 union territories, will continue on Friday.
At the meeting draft rules regarding GST were circulated and threshold for exemption and compensation norm discussed.
Clarity on base year for compensating states for loss of revenue following implementation of GST, which is to subsume an array of central and state levies including excise, service tax and VAT, will be deliberated further tomorrow.
Briefing reporters, Jaitley said that the timetable has been set keeping the April 1, 2017, deadline in mind.
“The target also involves the passage of CGST and IGST law at the central Parliament and then by the state legislatures the state GST law in the winter session itself.
“Starting from September 22, we roughly have two months time till November 22 to resolve all outstanding issues and therefore a draft timetable was given which also have been adopted,” Jaitley said.